patrick.net

What happened is that the dollar has been devalued to the hilt and its devaluation (i.e. printing of money, issuing of debt) was used to prop up the most "connected" (corrupt) sectors such as healthcare, housing and farming, which also happen to serve the essential needs of everyone. Gotta wait til the next crash.

300 percent more people crowding into the coastal areas than when grandpa was around?

Ceffer says

300 percent more people crowding into the coastal areas than when grandpa was around?

True, but those 300% more people are still each 4 times as productive leading to 1200% as much wealth, so it does not explain the drop in quality of life.

mell says

What happened is that the dollar has been devalued to the hilt and its devaluation

True, currency debasement steals wealth from the poor and the middle class and gives it to the rich, but for the guy living paycheck-to-paycheck that doesn't matter because he has no savings. So it still does not explain why the grandson can't live off his salary doing the same thing that his grandfather did and raised a family with.

It's not the devaluing dollar, the Trilateral Commission, or teh joos that is causing high real home prices in LA, it's simply supply & demand unbalance aka Market Failure.

Housing is *the* major life expense, and all this money isn't going into just the sticks & bricks but rather the actual deeded exclusive perpetual (for fee simple tenancy) right to use the land and housing good itself. To secure this right one has to outbid everyone else who wants this deeded right, and supply is limited if not fixed and demand is unbounded (everyone would like to own the whole world if they could).

The good side of the LA basin got filled up before I was born, and I'm getting old now!

There's been a lot of infill development, but not enough!

What I rented for $700 in 90025 in 1991 now rents for $2300! This is simply because supply of quality housing (or even shitty housing) hasn't kept up with Gen Y arriving on the rental market. Gen Y really started rolling in 1990, so they're turning 25 this year. The median Gen Yer is age 22!

Complicating matters is that since I last lived there in 1992, the crappy neighborhoods -- 80% of the land area -- have expanded more. Downtown has gentrified a bit but not enough to make a difference in the supply picture.

https://research.stlouisfed.org/fred2/series/CALOSA7POP

Bellingham Bill says

It's not the devaluing dollar, the Trilateral Commission, or teh joos that is causing high real home prices in LA, it's simply supply & demand unbalance aka Market Failure.

2008 the rents dropped to almost half of what they are today, same for house prices. Sure there is a growing population, but it's effects are lesser on the price (more people will live under one roof then). Can't spot the bubble? When the Fed announced they were buying MBS for an unlimited time until further notice and depressing rates to near zero that was a starting short for the big boys as well as small speculators to bid up houses again, roll over the debt for next to nothing until they get their desired payout, and for the banks to give mortgages to everybody, putting immense pressure on this sector. Without the MBS purchasing program and 6%+ interest rates house prices and rents would look much differently. The dollar was purposely devalued to support a few sectors.

Dan8267 says

True, currency debasement steals wealth from the poor and the middle class and gives it to the rich, but for the guy living paycheck-to-paycheck that doesn't matter because he has no savings. So it still does not explain why the grandson can't live off his salary doing the same thing that his grandfather did and raised a family with.

When talking about today's lower wage jobs such as grocery store workers it is likely that increased influx from women, students (student debt anyone?) - possibly with largely useless degrees - and (to a lesser extent) immigrants has put enormous pressure on the demand for these types of jobs, therefore reducing the salary.

Inflation is a process that transfers wealth to those who get the new money first from those who get it later. The grocers get the money late after the money has already gone around multiple rounds in the economy.

Also, grandpa's wage at the grocery store paid not only his labor but also grandma's labor at home cooking and cleaning at home in order to enable grandpa working at the store. Nowadays, your wife/girlfriend/hookup partner is supposed to be a strong and independent woman getting paid by her own employer. LOL!

Bill, if it makes you feel better as a multi-decade renter, those who bought in Detroit in the 1980's and those who bought in Tokyo in the 1980's (perhaps even your land lord) are even worse off than you are now.

People who bought in LA and NYC are like having invested in the successful companies owning the right set of patents. The usual anti-development policies advocated by the usual left only make the market position of the owners even stronger.

True, but those 300% more people are still each 4 times as productive leading to 1200% as much wealth, so it does not explain the drop in quality of life.

Are grocery store workers really 4 times more productive?

errc says

Are grocery store workers really 4 times more productive?

Workers in general are. In any case, today's grocery store workers are at least somewhat more productive than those of 70 years ago with laser scanners, electronic payment, and large-scale grocery stores. They certainly aren't less productive.

mell says

When talking about today's lower wage jobs such as grocery store workers it is likely that increased influx from women, students (student debt anyone?) - possibly with largely useless degrees - and (to a lesser extent) immigrants has put enormous pressure on the demand for these types of jobs, therefore reducing the salary.

Which is just a fancy way of saying that the owner class is taxing the wealth producers (workers) an even more outlandish percentage of their wealth production than two generations ago. Saying supply and demand isn't a justification, moral or economic, for something. They aren't magic words that cause fundamental reasons to become inconsequential.

mell says

2008 the rents dropped to almost half of what they are today

Where exactly was that at?

bob2356 says

mell says

2008 the rents dropped to almost half of what they are today

Where exactly was that at?

San Francisco bay area. The have roughly doubled since then. They would have increased somewhat via an organic recovery anyways, but at least 50% of the increase is due to the Fed buying MBS and suppressing rates. Speculators and big boys have been loading up on RE as soon as ZIRP and QE/MBS buying was decided. They will also have no qualms getting rid of non-performing debt as soon as the next crash hits. Rinse and repeat.